EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713612
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Suzlon Energy Australia applied for a TCO in respect of certain rotor blades on 29 August 2007.
Instrument
TCO No 0713612 was made on 09 November 2007. It declares that those certain rotor blades are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 10%. The rate of duty for the goods subject to the TCO is free.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0713612 is taken to have come into force on 29 August 2007.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Tariff Concession Instrument No. 0713612, enacted in 2007, is a legislative measure under the Customs Act 1901 designed to facilitate the application process for Tariff Concession Orders (TCOs). This instrument was introduced to address the need for streamlined and efficient procedures in granting tariff concessions to importers of specific goods, ensuring they benefit from reduced customs duties when certain criteria are met. The instrument was enacted by the Parliament of Australia with the intent to support economic activities by making it easier for businesses to import goods without the burden of high customs duties, thereby fostering trade and investment.
This legislative measure allows the Chief Executive Officer of Customs to grant tariff concessions to applicants provided no substitutable goods are produced in Australia, aligning with the policy objective of encouraging the importation of goods where local production does not exist. The instrument provides a formal mechanism for applications to be assessed and approved, facilitating smoother trade practices by ensuring that the application process is transparent and accessible to importers. The instrument's commencement on the day the application was lodged underscores the swift implementation intended to benefit importers without retroactively affecting their rights or imposing new liabilities.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Orders (TCOs), applies to individuals or entities seeking tariff concessions on specific goods imported into Australia. The Act allows for reduced rates of customs duty on goods specified in a TCO, which is issued by the Chief Executive Officer of Customs upon application and meeting certain criteria. The scope of this Act is nationwide, applying across the Commonwealth of Australia, and it is enforced by the CEO of Customs, who has the authority to make TCOs under section 269F of the Act. The TCO mechanism excludes goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The Act also outlines the process for applying for and evaluating TCOs, including the requirement to demonstrate that no substitutable goods are produced in Australia, as defined by sections 269C and 269D. Once a TCO is issued, it comes into force on the date the application is lodged, and it does not affect the rights of any person as at the date of registration, nor impose any liabilities on any person in respect of actions taken before the registration date.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0713612 under the Customs Act 1901 (the Act) provide for the application and issuance of a Tariff Concession Order (TCO) to reduce the customs duty on certain rotor blades. Under section 269F (1), any person may apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO is satisfied that the application is valid, section 269C requires the CEO to determine if the application meets the core criteria, which include whether no substitutable goods were produced in Australia on the day the application was lodged (section 269P(3)). If the application meets these criteria, the CEO must make a TCO as per section 269P(3), specifying the goods and the applicable tariff concession. In this case, the TCO was issued for certain rotor blades under item 50 of Schedule 4 to the Customs Tariff Act 1995, with the duty rate reduced from 10% to free.
The Act imposes several obligations on the parties involved. Under section 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be issued. This ensures transparency and provides an opportunity for stakeholders to voice their concerns. The CEO must then consider any submissions received before making a final decision. In this instance, no submissions were received, facilitating the straightforward issuance of the TCO. The Act also ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force (Regulations, paragraph 126(1)(r)).
The Customs Act 1901 imposes penalties for non-compliance with its provisions. While the specific penalties for breaching TCO-related provisions are not outlined in the explanatory statement, general penalties for breaches of customs laws can include fines and imprisonment. For example, under section 264-1 of the Criminal Code Act 1995, a person found guilty of contravening a provision of the Customs Act can be fined up to 10,000 penalty units or imprisoned for up to five years, or both, for an individual offence. Corporate entities can face even higher penalties. Additionally, section 147 of the Crimes Act 1914 provides for fines and imprisonment for persons who knowingly or recklessly make false statements in connection with customs matters. The precise penalties depend on the nature and severity of the breach.